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It seems that about 10% to 20% of workers opt out of their companies' 401(k) plans. That may seem like a shame, but it's not necessarily a bad thing.

The noble 401(k) plan isn't always as powerful a retirement provider as a traditional pension, but for many of us, it's all we've got going for us at work. For 2011, you can sock away up to $16,500 in your 401(k) account, and next year the limit will be $17,000. That kind of money can go a long way toward setting you up for a comfy retirement, but according to the Plan Sponsor Council of America, only about 5% of the 60 million plan participants out there contribute the maximum.

The upsides of 401(k)sA big benefit of 401(k)s is that they're tax-advantaged. If you earn $60,000 per year and you sock away $10,000, your taxable income is reduced by that $10,000. Thus, if you're in a 25% tax bracket, you're avoiding paying taxes on that money -- for now -- and you save $2,500. As long as you leave your money in the plan, it can grow tax-deferred. When you ultimately take your withdrawals, you'll pay taxes at your ordinary income tax rate.

One of the most compelling reasons to participate in a 401(k) plan is to take advantage of any matching funds available. Many companies will chip in some money in addition to your own, with a typical match being 50% of your payments, up to 6% of your salary. That's free money, and it can really add up.

The downsides can be significantIt's not all a bed of roses, though. For one thing, some 401(k) plans sport high fees, which can wipe out a significant chunk of your earnings. You can check your employer's plan rating at BrightScope.com: Ford (NYS: F) and Corning (NYS: GLW) , for example, are in the "lowest fees" category. While biopharmaceutical company Geron (NAS: GERN) gets top marks for the generosity of its matching plan, its fees are only average, and its investment selection is poor. Clearly, the company you keep matters. (This kind of information is also useful to would-be investors, suggesting how well various companies treat and attract employees.)

Meanwhile, you can accumulate a heck of a lot of money in a 401(k) plan, but you'll be very restricted in how you can invest it. Most plans offer a range of investments, often between 15 and 20 different funds. They'll frequently offer exposure to domestic and international stocks, and bonds, among other things. And increasingly, they'll offer some target-date funds, as well.

Missed opportunitiesIf your investing is limited to your 401(k), you can really miss out. For example, if you look at our nation's aging population and you see lots of dollars in the doctors' offices and nursing homes of tomorrow, you might want to invest in the Health Care REIT (NYS: HCN) . If you have a lot of faith in SandRidge Energy's (NYS: SD) plans to boost its drilling and oil production substantially, it might appeal as a portfolio candidate. And if you think that natural gas has a bright future and you expect to see many vehicles powered by it, you might be drawn to Westport Innovations (NAS: WPRT) and Clean Energy Fuels (NAS: CLNE) .

When restricted to funds as you are in 401(k)s, your upside is limited. A stock held by one of your funds might quadruple in value, but it might represent only 2% of the fund's overall value, so its impact is severely diluted. Of course, your downside is a bit protected by that diversification, as well. SandRidge, for instance, dropped more than 20% on a single day in August -- after a good earnings report.

What to doSo should you opt out of your 401(k) plan or not? Well, there's no one-size-fits-all answer. But here are some thoughts:

If, like most Americans, you're not good at saving and investing for retirement, then use the 401(k), as it makes things easy. Try to sock away as much as you can, too. A few thousand per year may not get you where you want to go.

If you'd like to invest in individual stocks, you might do so in addition to your 401(k) -- or forgo the 401(k) entirely. (If your employer offers a match, though, consider maximizing that first.)

Remember IRAs, too. They offer tax-advantaged ways to invest in individual stocks or mutual funds or both, though their maximum annual contribution is $5,000 to $6,000, depending on your age.

Don't opt out for the wrong reason. If you're doing so to invest directly in carefully chosen stocks, great. If you're doing so because of a genuine economic hardship, OK. If you just don't see the point in investing, perhaps because you're only 26 years old, think again. Just about all of us must invest for retirement, and the sooner we start, the better.

However you do it, you need to save and invest for a comfortable future. 401(k) plans can be great aids, provided we use them effectively. But there are other options, too. For a lot of concise, practical advice, check out our Rule Your Retirement newsletter, which you can try for free.